Correlation Between PVH Corp and Urban Outfitters
Can any of the company-specific risk be diversified away by investing in both PVH Corp and Urban Outfitters at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PVH Corp and Urban Outfitters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PVH Corp and Urban Outfitters, you can compare the effects of market volatilities on PVH Corp and Urban Outfitters and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PVH Corp with a short position of Urban Outfitters. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVH Corp and Urban Outfitters.
Diversification Opportunities for PVH Corp and Urban Outfitters
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PVH and Urban is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding PVH Corp and Urban Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Outfitters and PVH Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PVH Corp are associated (or correlated) with Urban Outfitters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Outfitters has no effect on the direction of PVH Corp i.e., PVH Corp and Urban Outfitters go up and down completely randomly.
Pair Corralation between PVH Corp and Urban Outfitters
Assuming the 90 days trading horizon PVH Corp is expected to under-perform the Urban Outfitters. But the stock apears to be less risky and, when comparing its historical volatility, PVH Corp is 1.29 times less risky than Urban Outfitters. The stock trades about -0.43 of its potential returns per unit of risk. The Urban Outfitters is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,300 in Urban Outfitters on October 30, 2024 and sell it today you would earn a total of 300.00 from holding Urban Outfitters or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PVH Corp vs. Urban Outfitters
Performance |
| Timeline |
| PVH Corp |
| Urban Outfitters |
PVH Corp and Urban Outfitters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PVH Corp and Urban Outfitters
The main advantage of trading using opposite PVH Corp and Urban Outfitters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVH Corp position performs unexpectedly, Urban Outfitters can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Urban Outfitters will offset losses from the drop in Urban Outfitters' long position.| PVH Corp vs. AOYAMA TRADING | PVH Corp vs. Apollo Investment Corp | PVH Corp vs. Comba Telecom Systems | PVH Corp vs. HUTCHISON TELECOMM |
| Urban Outfitters vs. FIH MOBILE | Urban Outfitters vs. Charter Communications | Urban Outfitters vs. Host Hotels Resorts | Urban Outfitters vs. BORR DRILLING NEW |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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